Builders FirstSource Q4 Earnings Miss Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 hours ago
0mins
Should l Buy BLDR?
Source: seekingalpha
- Disappointing Earnings: Builders FirstSource reported a Q4 non-GAAP EPS of $1.12, missing expectations by $0.16, indicating a significant decline in profitability that may affect investor confidence.
- Revenue Decline: The company's Q4 revenue of $3.4 billion represents a 10.5% year-over-year decrease, falling short of market expectations by $60 million, reflecting a weak demand environment for building materials.
- Significant EBITDA Drop: Adjusted EBITDA decreased by 44.3% to $274.9 million, primarily driven by lower gross margins and reduced operating leverage, highlighting challenges in cost management.
- Cautious Outlook: The company projects net sales for 2026 to range between $14.8 billion and $15.8 billion, with adjusted EBITDA expected between $1.3 billion and $1.7 billion, indicating potential growth but necessitating close monitoring of market fluctuations' impact on performance.
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Analyst Views on BLDR
Wall Street analysts forecast BLDR stock price to rise
14 Analyst Rating
6 Buy
7 Hold
1 Sell
Moderate Buy
Current: 120.570
Low
109.41
Averages
124.28
High
150.00
Current: 120.570
Low
109.41
Averages
124.28
High
150.00
About BLDR
Builders FirstSource, Inc. is a supplier of building products, prefabricated components, and value-added services to the professional market segment for new residential construction and repair and remodeling. It provides customers with an integrated homebuilding solution, offering manufacturing, supply, delivery and installation of a full range of structural and related building products. Its product categories include Manufactured Products; Windows, Doors and Millwork; Specialty Building Products and Services, and Lumber and Lumber Sheet Goods. It serves customers from distribution and manufacturing facilities (some of which are co-located) that produce value-added products such as roof and floor trusses, wall panels, stairs, vinyl windows, custom millwork and pre-hung doors. It also distributes dimensional lumber and lumber sheet goods, millwork, windows, interior and exterior doors, and other specialty building products. It operates in 43 states with approximately 585 locations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Builders FirstSource Q4 Earnings Miss Expectations
- Disappointing Earnings: Builders FirstSource reported a Q4 non-GAAP EPS of $1.12, missing expectations by $0.16, indicating a significant decline in profitability that may affect investor confidence.
- Revenue Decline: The company's Q4 revenue of $3.4 billion represents a 10.5% year-over-year decrease, falling short of market expectations by $60 million, reflecting a weak demand environment for building materials.
- Significant EBITDA Drop: Adjusted EBITDA decreased by 44.3% to $274.9 million, primarily driven by lower gross margins and reduced operating leverage, highlighting challenges in cost management.
- Cautious Outlook: The company projects net sales for 2026 to range between $14.8 billion and $15.8 billion, with adjusted EBITDA expected between $1.3 billion and $1.7 billion, indicating potential growth but necessitating close monitoring of market fluctuations' impact on performance.
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Builders FirstSource Set to Announce Q4 Earnings on February 17
- Earnings Announcement: Builders FirstSource (BLDR) is set to announce its Q4 earnings on February 17 before the market opens, with consensus EPS estimate at $1.28, reflecting a 44.6% year-over-year decline, and revenue estimate at $3.46 billion, down 8.9% year-over-year.
- Historical Performance: Over the past two years, BLDR has consistently beaten EPS estimates 100% of the time and revenue estimates 75% of the time, indicating a strong track record of financial performance.
- Estimate Revisions: In the last three months, EPS estimates have seen one upward revision and six downward revisions, while revenue estimates have also experienced one upward revision and six downward revisions, suggesting a cautious market outlook for the company.
- Market Sentiment Analysis: Despite analysts maintaining a neutral stance on Builders FirstSource, suggesting it is neither worth shorting nor overly exciting, there remains a level of market interest regarding the company's future profitability.
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- Employment Cost Index Decline: The US Q4 employment cost index rose by +0.7% quarter-over-quarter, below the expected +0.8%, marking the smallest increase in 4.5 years, suggesting easing labor cost pressures that may influence the Fed's monetary policy decisions.
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- Demand Activation: Industry giants like Lennar and Taylor Morrison are actively participating, planning to activate sidelined demand through a rent-to-own model, particularly benefiting first-time buyers, which is expected to significantly enhance sales velocity and market absorption rates, driving overall industry recovery.
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- Supply Chain Effects: Builders FirstSource, as a supplier of construction materials, stands to benefit from the million-home initiative, with expectations of incremental growth across regional markets, particularly in standardization and logistics efficiency, further propelling the overall development of the construction industry.
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Builders FirstSource Q4 Earnings Miss Expectations
- Disappointing Earnings: Builders FirstSource reported a Q4 non-GAAP EPS of $1.12, missing expectations by $0.16, indicating a significant decline in profitability that may affect investor confidence.
- Revenue Decline: The company's Q4 revenue of $3.4 billion represents a 10.5% year-over-year decrease, falling short of market expectations by $60 million, reflecting a weak demand environment for building materials.
- Significant EBITDA Drop: Adjusted EBITDA decreased by 44.3% to $274.9 million, primarily driven by lower gross margins and reduced operating leverage, highlighting challenges in cost management.
- Cautious Outlook: The company projects net sales for 2026 to range between $14.8 billion and $15.8 billion, with adjusted EBITDA expected between $1.3 billion and $1.7 billion, indicating potential growth but necessitating close monitoring of market fluctuations' impact on performance.
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- Market Performance: Equities experienced a decline last week, with all three major indexes falling by at least 1.2%.
- Economic Indicators: This downturn occurred despite a better-than-expected jobs report from the Bureau of Labor Statistics and a relatively stable inflation report.
See More
Builders FirstSource Set to Announce Q4 Earnings on February 17
- Earnings Announcement: Builders FirstSource (BLDR) is set to announce its Q4 earnings on February 17 before the market opens, with consensus EPS estimate at $1.28, reflecting a 44.6% year-over-year decline, and revenue estimate at $3.46 billion, down 8.9% year-over-year.
- Historical Performance: Over the past two years, BLDR has consistently beaten EPS estimates 100% of the time and revenue estimates 75% of the time, indicating a strong track record of financial performance.
- Estimate Revisions: In the last three months, EPS estimates have seen one upward revision and six downward revisions, while revenue estimates have also experienced one upward revision and six downward revisions, suggesting a cautious market outlook for the company.
- Market Sentiment Analysis: Despite analysts maintaining a neutral stance on Builders FirstSource, suggesting it is neither worth shorting nor overly exciting, there remains a level of market interest regarding the company's future profitability.
See More
Powell's Tenure Nears End, Market Focuses on His Legacy
- Monetary Policy Balance: As Fed Chair Powell's tenure approaches its end, the market is keenly focused on his performance in balancing maximum employment and stable prices, especially with the upcoming release of the latest meeting minutes, marking one of his final meetings in office.
- Interest Rate Challenges: During Powell's leadership, the Fed has navigated emergency interventions and an aggressive rate-hiking cycle, with the benchmark rate rising from near zero to over 5%; despite initially viewing inflation as 'transitory,' achieving a 'soft landing' for the economy will be a key part of his legacy.
- Market Reaction Expectations: Investors are optimistic about the upcoming personal consumption expenditure data, although the cooler-than-expected CPI could impact the Fed's interest rate outlook, with markets currently pricing in only two quarter-point cuts for the year.
- Industry Dynamics Observation: As concerns over AI disruption grow, stocks in software, finance, and real estate have seen declines, prompting investors to search for the next potentially affected sectors, with Walmart and Deere's upcoming earnings reports likely to be focal points for market attention.
See More
Mixed Close for US Stocks as Retail Sales Stagnate
- Retail Sales Weakness: US December retail sales were unchanged month-over-month, falling short of the +0.4% expectation, indicating weakness in consumer spending that could lead to a downward revision in Q4 GDP, thereby impacting market confidence and economic growth outlook.
- Employment Cost Index Decline: The US Q4 employment cost index rose by +0.7% quarter-over-quarter, below the expected +0.8%, marking the smallest increase in 4.5 years, suggesting easing labor cost pressures that may influence the Fed's monetary policy decisions.
- Mixed Market Performance: The Dow Jones Industrial Average reached a new all-time high, closing up +0.10%, while the S&P 500 and Nasdaq 100 indices fell by -0.33% and -0.56%, respectively, reflecting divergent market sentiment and uncertainty.
- Focus on Upcoming Economic Data: The market will closely monitor upcoming economic data, including January nonfarm payrolls and unemployment rate, which are expected to significantly influence future monetary policy and market trends.
See More
Trump Homes Initiative Could Reshape U.S. Housing Market
- Affordability Crisis: Major builders are launching the 'Trump Homes' initiative to tackle America's housing affordability crisis, aiming to construct up to 1 million entry-level homes, which could unleash over $250 billion in housing development funding, blending private capital with government-friendly policies for significant market impact.
- Demand Activation: Industry giants like Lennar and Taylor Morrison are actively participating, planning to activate sidelined demand through a rent-to-own model, particularly benefiting first-time buyers, which is expected to significantly enhance sales velocity and market absorption rates, driving overall industry recovery.
- Material Innovation Demand: Xeriant's advanced building materials, such as the NEXBOARD panel system, align with the needs of large-scale housing initiatives by reducing costs, improving construction speed, and enhancing durability, and are anticipated to gain commercial relevance under policy encouragement, aiding builders in cost control.
- Supply Chain Effects: Builders FirstSource, as a supplier of construction materials, stands to benefit from the million-home initiative, with expectations of incremental growth across regional markets, particularly in standardization and logistics efficiency, further propelling the overall development of the construction industry.
See More
